A left-field test of confidence in European banks could come soon from Spain, low on the radar of investors obsessed with Italy. In May, Banco Popular raised half its then market capitalisation (€2.5bn) to increase provisions for non-performing loans and stabilise shares down nearly two-thirds since 2014. The bank has continued to bleed confidence - and the imminent departure of the powerful chairman is unlikely to change that.

The ousting of Angel Ron, announced earlier this month, is long overdue. As chief executive and then chairman since 2002, the man whose name is a Spanish synonym for an intoxicant presided over a 92 per cent crash in Popular's equity value. Spain's housing market crash dealt a near-fatal blow to a balance sheet that now has a book value of 0.4 times. Nearly one in five loans is non-performing. The "real estate" division lost €1bn before taxes in the first nine months. It stands to lose considerably more by the year-end as Popular is expected to book €4.7bn in annual provisions, driving its core equity capital ratio down below 11 per cent. The Texas ratio - a measurement of NPLs as a proportion of equity and loan loss provisions - stands at a whopping 90 per cent, although this should decline as provisions rise.

Like its UK peer Royal Bank of Scotland, Popular points out that beneath the dross is a solid SME-focused bank which delivers a double digit return on equity. Bulls hope Mr Ron's departure will attract a buyer. The theory is that the bank will continue to benefit from Spain's solid economic growth. Non-performing loans are falling across the sector at double digits annually, according to the Bank of Spain.

Popular plans to cut about a fifth of its workforce for €375m in restructuring charges, although at €144,000 per person Berenberg reckons costs look suspiciously low compared with average one-offs announced by peers Caixabank and Santander (€300,000-€430,000 per person).

The bank's incoming head, Emilio Saracho, formerly of JPMorgan, may need to lead Popular into its fourth capital-raising since the financial crisis. Ominously, the shares have halved since the last rights issue, even as the Spanish banking index has risen. A sale is another option. But Banco Sabadell has reportedly walked away from talks. If BBVA and Santander are equally reticent, the financial authorities may have to strong-arm consolidation, or clean up the mess itself, as in Italy. Popular, ironically, is the Spanish bank no one likes. Email the Lex team at lex@ft.com